Key Takeaways
What drove the short-term price bounce for ICP?
Likely, the build-up of short liquidations at the $3.5 region over the past 24 hours helped attract prices higher to $3.67, alongside high trading volumes.
Can this move drive a long-term uptrend?
It is unlikely to usher in a recovery by itself- ICP has been laboring under a steady downtrend since March, and its weekly structure remained bearish.
Internet Computer [ICP] was up 6.5% in 24 hours. The gains were possibly due to a surge in demand in recent hours, and aided by a cluster of liquidations at the $3.55 level.
Classed as an “AI and Big Data” token per CoinMarketCap, ICP was trading at a supply zone from mid-October. The $3.75 region had served as resistance following the crash on the 10th of October.
Meanwhile, over the long-term, the trend has been bearish.
The 1-week chart displayed a prominent downtrend since March. The Bitcoin [BTC] and large-cap altcoin rallies in recent April and June did little to break this downtrend, making October’s sell-off merely a trend continuation.
What fueled the price bounce, and where to next for ICP?
On the 1st of November, ICP prices dipped to the liquidity cluster at the $3.33 level. Before they could dip further, prices bounced to $3.5, where they meandered for nearly a day.
During these hours, a bunch of short liquidations built up at $3.55.
This built-up liquidity attracted ICP higher on the 2nd of November, and fueled a bounce as high as $3.67. This was followed by another price dip.
Generally, prices gravitate towards clusters of liquidity before reversing or continuing higher, depending on the prevalent trend. At press time, the next magnetic zone of note is at $3.7-$3.75.
The higher timeframe bias was not fully bullish, though.
Volume up, momentum down
Source: ICP/USDT on TradingView
The 1-day chart showed a bullish structure, but also a notable supply zone at $3.78.
Although there was high trading volume on the 1st of November, the CMF remained below zero. So too did the Awesome Oscillator, underlining ICP’s prevailing bearish momentum.
Overall, caution would be prudent for the bulls. A breakout past $3.8 and a retest as support would be a buying opportunity.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
